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Investing.com - RBC Capital upgraded Dunelm Group PLC (LON:DNLM) from Sector Perform to Outperform on Monday, while raising its price target to GBP13.00 from GBP12.00.
The upgrade comes as RBC Capital sees potential for accelerated growth at the British home furnishings retailer, driven by expected market share gains and gross margin improvement.
RBC Capital noted that Dunelm shares have experienced a de-rating of 2-3 P/E turns over the past two years, amid a stable profit trend and investor concerns about market maturity.
The investment firm highlighted that Dunelm shares have underperformed the sector despite what it views as an improving outlook for the company.
RBC Capital identified this disconnect between share performance and business prospects as an opportunity for investors, leading to the rating upgrade.
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